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Oil prices slightly increased on Thursday but were unable to fully recover from the more than 9% decline in the previous three days as worries about consumer demand overrode signs that the U.S. may hold off on raising interest rates.
By 0257 GMT, Brent futures had increased by 17 cents, or 0.2%, to $72.50 per barrel.
Brent, meanwhile, has decreased more than 9% since Friday and reached a low of $71.28 earlier on Thursday.
West Texas Intermediate (WTI) crude for the United States increased by 2 cents to $68.62 a barrel.
From Friday to Wednesday’s closing, WTI declined by about 11%, and earlier on Thursday, it hit a low of $63.64.
Prices have fallen this week as a result of China, the world’s largest oil importer, showing signs of poor industrial development and after the United States, the world’s largest oil consumer, boosted interest rates to their highest level since 2007 on Wednesday, endangering the country’s potential for future economic growth.
Nevertheless, investors and analysts are re-entering the market due to some encouraging growth in the U.S. services sector and expectations that output cuts by significant producers, which began this month, will limit supply.
While the Fed increased interest rates by a quarter of a percentage point as anticipated, it also hinted that future increases might be postponed to give officials time to assess the effects of recent bank failures and await a resolution to the debate over raising the United States debt ceiling.
Additionally, the overall financial markets have been affected by the failure of the third U.S. bank since March as a result of their inability to control rising interest rates.
At the beginning of this month, the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, which includes Russia, started voluntary output cuts of about 1.16 million barrels per day.
These cuts are expected to support the market as we move into the summer peak demand period.
Investors are also anticipating news from the European Central Bank, which is scheduled to hike interest rates on Thursday for the seventh consecutive meeting.
Concerns about Chinese demand are still present in the market, particularly in light of a private sector survey released on Thursday that revealed surprisingly lower manufacturing activity in April as a result of weaker domestic demand.
Source: Allnews Nigeria
